February 19, 2013
Practices that contact their clients more than ten times a year are nearly 300% more profitable than those that have less frequent contact, according to Business Health.
The consultancy firm studied the results of four years’ worth of its CATScan diagnostic data, a tool which benchmarks performance data gathered from a practice’s clients against other advice businesses. It identified a clear link between practice profitability and the frequency with which advisers contacted their clients.
Those practices that communicated with clients between five and ten times a year were 174% more profitable than those that had less than five client contacts. The profitability grew to 287% when there were more than ten contacts in a twelve month period.
Business Health also found that clients who had been with their adviser between three and seven years were the most likely to feel disconnected, presenting the greatest business risk to the practice. Firms that had a greater focus on communicating with these clients achieved higher results in the CATScan.
The findings form part of research commissioned by the Association of Financial Advisers (AFA), in partnership with AIA Australia. Presenting the results at the AFA’s GenXt Roadshow series earlier this month, AIA’s Pina Sciarrone said that while advisers had been intuitively developing relationships with their clients for many years, it was important to look at what the best practices were doing, in order to raise the professionalism of the industry.
“There’s no mystery to how you develop closer relationships with your clients,” she said.
“Frequent communication is a key driver to relationships; which is why we see some of the best practices have developed quite structured communication programs and processes.”
Ms Sciarrone gave the example of using a ‘communication calendar’ to structure client contacts: “Create a communication calendar whereby you indicate when you’re going to be sending emails out to a particular client group, when you’re going to be doing a review for a client group, when you’re going to be running events or sending newsletters. That way you can see the frequency and the variety of your communication.”
There’s no mystery to how you develop closer relationships with your clients
She also recommended advisers make sure their communications are proactive, meaningful and personalised.
“That means giving consideration to the language, content, tone, and the method of delivery, to cater for the different demographics of your audience,” Ms Sciarrone said. “If you’ve got an older client base, for example, then perhaps sending emails isn’t the best way to go.”
The AFA says it will make the results of the research available to members via a white paper shortly.